sixth progress report on the action taken pursuant … · 2018. 10. 2. · 6. prosecutions have...

Government of IndiaMinistry of Finance

SIXTH PROGRESS REPORT ON THE ACTION TAKEN

PURSUANT TO THE RECOMMENDATIONS OF

THE JOINT PARLIAMENTARY COMMITTEE ON

STOCK MARKET SCAM AND MATTERS RELATING THERETO

May 2006

INTRODUCTION

The Report of the Joint Parliamentary Committee on Stock Market Scam and mattersrelating thereto was presented to the Parliament on 19th December 2002. In Para 3.31, the JPCrecommended that the Government should present its Action Taken Report to the Parliamentwithin six months and, thereafter, a Progress Report every six months until action on all therecommendations has been fully implemented to the satisfaction of Parliament. The Governmentsubmitted the Action Taken Report to the Parliament on 9.5.2003. First Progress Report waspresented in the Lok Sabha/Rajya Sabha on 12.12.2003 and 16.12.2003 respectively, SecondProgress Report on 10.6.2004, third on 09.12.2004, fourth on 29.7.2005 and fifth on 20.12.2005.

2. JPC had made 276 recommendations/observations/conclusions. In the ATR presented tothe Parliament during May 2003, final response of the Government in respect of 111recommendations had been given. In the Progress Report presented during December, 2003,action was completed on 39 recommendations. In the Second Progress Report action wascompleted on 36 recommendations, in the Third Progress Report on 18 recommendations, in theFourth Progress Report on 23 recommendations and in the Fifth Progress Report on 06recommendations. Action has been completed on further 03 recommendations which bringsdown the number of pending recommendations to 40.

I N D E X

Sl. No. Para. No. Subject in brief Page Nos.

1. 2.15 Nexus between brokers, banks and corporate houses. 1-592. 4.44 Swiss Bank accounts of Shri Ketan Parekh. 60-643. 4.68 Proceedings against defaulters brokers. 64-684. 4.69 Criminal proceedings initiated against Shri H.C. Biyani. 68-695. 4.117 Irregularities in SHCIL. 70-776. 5.64 Expeditious disposal of criminal cases against Administrator, MMCB & Ors. 77-797. 5.109 Irregularities in the City Cooperative Banks Ltd., Lucknow. 79-848. 5.110 - do - 84-859. 5.111 Laxity on the part of apex. regulators –the RBI and RCS. 85-86

10. 5.113 Recommendations of the JPC. 86-8711. 5.159 Action against CCBL. 87-8912. 6.94 Involvement of Banks in the payment crisis in CSE. In action of CSE and SEBI. 90-9313. 6.97 Software bug in CSE. 9414. 6.104 Proactive role by SEBI in the affairs of CSE. 94-9515. 7.4 Investigating role of promoters and corporate entities. 96-9716. 7.51 Expeditious action on involvement of promoters/corporate houses in manipulation of prices of scrips. 98-9917. 7.53 Corrective measures on professional allotment and private placement. 99-10118. 7.54 Non-availability of required support from concerned regulatory and marketing bodies to make purposeful

recommendation on nexus of corporate bodies-brokers banks and other. 10119. 8.76 Action against OCB’s and FII’s. 102-10320. 9.31 Role of EDs/ nominee director in Stock exchanges vis-à-vis demutualisation. 10321. 10.11 Observations regarding amending Chartered Accountants’ Act 1949. 103-10422. 10.80 Suggestions for setting up independent board for ensuring quality audit to strengthening of penal

provisions against auditors. 105-10623. 11.33 Expeditious decision for amendments in Cos. Act. 106-10724. 11.37 Rationalisation of penalties. 10725. 11.39 Amendments to Chartered Accountants Act. 107-10826. 11.41 Need for a healthy auditor-management relationship. 10827. 12.76 Special Courts. 109-11028. 12.121 Investigations against ZEE Telefilms. 110-11229. 12.199 Disposal Committee headed by custodian. 112-12030. 14.60 Special courts for expeditious disposal of investor’s complaints. 120-12331. 16.21 Action against officials who were party to sanctioning inter-scheme transfers in violation of the policy guidelines. 123-12432. 16.28 UTI should formalize a comprehensive investment policy. 124-126

33. 16.29 Investment by UTI in DSQ and Numero Uno International. 126-12734. 16.31 Action against officials involved in arbitrary decision making. 127-13035. 16.37 Thorough enquiry of the secondary market transactions in the shares of companies identified by the

Tarapore Committee. 130-13136. 16.47 Comprehensive audit and investigation into purchase of stocks by UTI. 131-13237. 16.50 Departmental proceedings against UTI officials. 132-13338. 16.53 -do- 133-13539. 16.56 IDBI should hold its appointees responsible for not framing UTI’s assured return schemes in compliance

with SEBI guidelines. 135-13640. 17.14 Quantum jump of inter scheme transfers from/to US-64. 136-13741. 18.19 Nexus between Chairman SHCIL, UTI, brokers, promoter of a group etc. 137-13942. 18.20 Recommendations relating to close nexus between corporate promoters, brokers, broker directors

of CSE and officials of SHCIL and UTI. 139-14043. 21.9 Accountability/departmental proceedings etc for UTI actions. 140-141

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Sl. No. Para. No. Subject in brief Page Nos.

As reported in May, 2003SEBI had conducted investigations into the alleged marketmanipulations. Based on investigations, SEBI had taken actionsas given below:1. SEBI vide Orders dated April 4, 2001 and April 10, 2001 undersection 11B of the SEBI Act debarred Classic Shares and StockBroking Services (CSSB), Triumph Securities Ltd (TSL), TriumphInternational Finance India Ltd (TIFL), NH Securities Ltd. (NHSec), V N Parekh Securities Ltd (VNP Sec), KNP Securities Ltd(KNP Sec), the entities controlled by and connected with Mr.Ketan Parekh, and their directors Mr. Ketan Parekh and Mr. KartikParekh from undertaking any fresh business as a stock brokeror merchant banker.2. SEBI has cancelled the certificate of registration granted toTriumph International Finance India Ltd to act as a stock broker.3. Adjudication order dated July 31, 2002 passed against KetanParekh entities namely Classic Credit Ltd, Panther InvestradeLtd for their dealings in shares of Aftek Infosys Ltd, levying apenalty of Rs. 5 lacs.4. Certificate of registration of Credit Suisse First Boston (I)Securities Pvt Ltd (CSFB Securities) has been suspended forthe period of two years w.e.f. April 18, 2001 for aiding, abetingand assisting Ketan Parekh entities in market manipulations.5. Applications submitted by M/s Credit Suisse First Boston (aForeign Institutional Investor), for renewal of its FII registrationand also renewal/registration of its sub-accounts viz. Kallar KaharInvestments Limited, Credit Suisse First Boston (Cyprus) Limitedand Credit Suisse First Boston, Singapore Branch have beenrejected by SEBI.6. Prosecutions have been filed on March 7, 2003 vide case no123/2003 in the court of Addl. Chief Metropolitan Magistrate, 8thCourt, Esplanade, Mumbai against the following entitiesconnected/associated with Ketan Parekh:

1. Classic Credit Ltd2. Shri Kirtikumar N. Parekh

SIXTH PROGRESS REPORT (MAY 2006) OF THE ACTION TAKEN PURSUANT TO THERECOMMENDATIONS OF JOINT PARLIAMENTARY COMMITTEE ON STOCK MARKET SCAM

AND MATTERS RELATING THERETO – 2002.

Sl.No. Para No.Observation/Recommendation of JPC Reply of Government/Action Taken Further Progress

1. 2.15 The Committee note that Ketan Parekhwho emerged as a key player in this scamreceived large sums of money from thebanks as well as from the Corporatebodies during the period when SENSEXwas falling rapidly. This led the Committeeto believe that there was a nexus betweenKetan Parekh, banks and the corporatehouses. The Committee recommend thatthis nexus be further investigated by SEBIor Department of Company Affairsexpeditiously.

DSQ SoftwareThe Directors/promoters of DSQ SoftwareLtd. had appealed against SEBI’s orderdated 9.9.2005. SAT vide order dated8.12.2005 has pronounced the following:

1. Order against directors of DSQSoftware Ltd. other than DineshDalmia has been upheld by SATand on considering the periodalready undergone by thedirectors, SAT observed that nofurther prohibition is required.

2. SAT has upheld SEBI’s orderagainst Dinesh Dalmia and DSQSoftware Ltd. with modification.

SEBI has filed an application to SAT forclarification of SAT’s order dated8.12.2005 against Dinesh Dalmia andDSQ Software Ltd.

Padmini Technologies LTD. (PTL)Against PTL and its whole time director

After the final order of SAT, an amount ofRs. 1,00,000 was deposited by Shri VivekNagpal with SEBI. PTL also deposited asum of Rs. 1,50,000/- with SEBI.

In respect of proceedings u/s 11B of SEBIAct, an opportunity of fresh personalhearing for PTL & its directors wasscheduled for 15.12.2005, which has beenpostponed.


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3. Shri Ketan V Parekh4. Shri Kartik K Parekh5. Panther Fincap & Mgt. Services Ltd.6. Shri Navinchandra Parekh7. Luminant Investment Private Ltd8. Shri Arun J Shah9. Chitrakut Computers Pvt. Ltd10. NH Securities Ltd.11. Shri V N Parekh12. Classic Shares & Stock Broker Ltd13. Shri Kaushik C Shah14. Shri Mukesh Joshi15. Saimangal Investrade Ltd16. Classic Infin Ltd17. Panther Investrade Ltd

7. SEBI has also taken actions against promoters wherever theviolations of SEBI Act and Regulations have been observed.Details of such actions given below:a. Actions against DSQ Software Ltd and their promoters· Orders were issued under section 11B of SEBI Act against

DSQ Software Ltd and Shri Dinesh Dalmia, which is as givenbelow:

DSQ to cancel this alleged acquisition of FortunaTechnologies being done on swap basis after followingthe procedure laid down under the Companies Act. DSQ be prohibited from accessing capital market for aperiod of one year or completion of investigation andaction thereupon whichever is later.Mr Dinesh Dalmia, Managing Director, DSQ be debarredfrom dealing in securities for a period of one year orcompletion of investigation and action thereuponwhichever is later.

· Prosecutions have been filed on April 4, 2003 vide case no2776/2003 in the court of XIII Metropolitan Magistrate,Saidapet, Chennai against DSQ Software, Directors of DSQSoftware including Shri Dinesh Dalmia

· First Information Report (FIR) filed against DSQ Software,Directors of DSQ Software including Shri Dinesh Dalmia

b. Actions against Global Trust Bank promoters

Against OthersSanjay Kumar, Chartered AccountantThe hearing was fixed along with otherDelhi based entities on 15.12.2005, whichhas been postponed.

Kolkatta based preferential allotteesAn opportunity of personal hearing wasscheduled for various Kolkatta basedentities in Delhi on 15.12.2005. However,request was received from some Kolkattabased entity to change the hearing dateand venue and the hearing was adjourned.

Delhi based preferential allotteesThe hearing was fixed along with otherDelhi based entities on 15.12.2005.However, some Delhi based entitiesbelonging to Goenka group gave detailedreply to SEBI’s SCNs and sought anotheropportunity of personal hearing. Thus,hearing of all Delhi based entities wasadjourned.

Shonkh Technologies Ltd.Action against promoters andpromoter associate entities u/s 11BHearing for promoter and promoterassociate entities (15 in number) was fixedfor 12th April, 2006.

Action relating to listing of shares onDSEAdjudication Officer vide order dated 10June, 2005 has imposed a penalty of Rs.50,000/- on Shonkh TechnologiesInternational Ltd. The entity paid thepenalty in December, 2005.


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Orders were issued under section 11B of SEBI Act againstpromoter entities not to buy, sell or transfer, pledge or disposeoff or deal in any other manner the shares of Global TrustBank Ltd, directly or indirectly.

· Ramesh Gelli· Premkala Gelli· Jayant Madhav· Girrish Gelli· Niraj Gelli· Sridhar Subasri· Annapurna Sridhar· Anjanaya Traders Pvt. Ltd.· Chiranjeevi Traders Pvt. Ltd· Gajanan Financial Services Pvt. Ltd.· Gajmukh Investments Pvt Ltd.· Kadrish Finance & Investments Pvt. Ltd.· Bombay Mahalakshmi Traders Pvt. Ltd.

c. Actions against Aftek Infosys promotersAdjudication order dated July 31, 2002 passed against promotersof Aftek Infosys, levying penalty of Rs. 5.50 lakh

· Ranjit Dhuru· Nitin Shukla· Ashutosh Humnanbadkar· Mukul Dalal· Pramod Broota· Charuhas Khopkar· Sandip Save· Ravindranath Malekar

8. SEBI has taken note of JPC observations/ recommendations.As reported in December 2003No change in the status.As reported in June, 2004SEBI has submitted the following progress:-DSQ SoftwareAction against stock brokers:The registration of following two brokers has been suspendedfor one year vide SEBI Order dated 04/03/2004

1. Mehta & Ajmera2. Himanshu Ajmera

Reply received from A Nitin CapitalServices Ltd. to the post-enquiry showcause notice is under examination.

M/s Iris Infrastructurals Pvt. Ltd. hadappealed in SAT against the order ofAdjudicating Officer imposing a penalty ofRs. 1 crore.

SAT vide order dated 14.3.2006, reducedthe penalty from Rs. 1 crore to Rs. 1 Lakh.

Global Trust BankSEBI has passed an order against TCFCSecurities Limited (formerly known as 20th

Century Securities Ltd.) on 10.1.2006indicating that there was no cause of anyfurther directions.

SEBI has passed an order against KallarKahar, Sub-Account of FII-CSFB (nowknown as Credit Suisse First Boston(Mauritius) Ltd.) on 10.1.2006 indicatingthat there was no cause of any furtherdirections.

Hearing of Vidyut Investments Ltd. wascompleted on 14.02.2006.

SEBI has passed an order against RP&CInternational on March 21, 2006. In viewof earlier debarment, no further directionsare issued.

SEBI has passed an order against CoralReef Inv. Co. Private Limited, Sub-accountof RP&C International on March 21, 2006.


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The registration of following two brokers has been cancelled videSEBI Order dated March 8, 2004 for market manipulation whichincludes their dealings in DSQ Software Ltd.

1. N.H. Securities Ltd.2. Classic Shares and Stock Broking Services Ltd.

Actions against entities associated with/controlled by KetanParekhThe following nine entities which are associated with /controlledby Ketan Parekh have been prohibited from buying, selling ordealing in securities in any manner directly or indirectly and alsodebarred from associating with the securities market, for a periodof fourteen years vide SEBI Order December 12, 2003:

i. Shri Ketan V. Parekhii. Kartik K. Parekhiii. Classic Credit Ltdiv. Panther Fincap and Management Services Ltd.v. Luminant Investment Pvt Ltd.vi. Chitrakut Computers Pvt. Ltd.vii. Saimangal Investrade Ltd.viii. Classic Infin Ltdix. Panther Investrade Ltd.

Out of these 9, action against the following three entities wastaken for market manipulation which includes their dealings inDSQ Software Ltd.:

1. Classic Credit Ltd2. Panther Fincap and Management Services Ltd.3. Luminant Investment Pvt Ltd.

DSQ Industries Ltd.Against PromotersA show cause notice dated February 20, 2004 was issued to thefollowing entities under Regulation 11 and 11B of SEBI Act readwith Regulation 11 of SEBI (Prohibition of Fraudulent and UnfairTrade Practices) Regulations, 1995

· M/s. DSQ Holdings Ltd.· M/s. Hulda Properties and Trades Ltd.· Shri Dinesh Dalmia· M/s. Cooltex Commodities Ltd.· M/s. Greenfield Investments Pvt. Ltd.· M/s. Arun Polymers Pvt. Ltd.

In view of earlier debarment, no furtherdirections are issued.

Zee TelefilmsHearing was granted to Zee Telefilms Ltd.and its promoter entities by Whole TimeMember of SEBI on January 17, 2006.During the hearing, they raised issuesregarding inspection of certain documentsand cross examination of witnesses. Asdirected by the Whole Time Member,detailed reply was sent to them on January31, 2006 and asked them to file writtensubmissions within 10 days. Reply wasreceived on March 20, 2006 from thepromoter entities of Zee Telefilms Ltd. ZeeTelefilms Ltd. submitted reply to the ShowCause Notice vide letter dated March 31,2006. Further action is in progress.

Global Tele-Systmes Ltd. (now GTLLtd)Common enquiry had been initiatedagainst Hem Securities Ltd. for trading inthe scrip of HFCL, Adani Exports Ltd. andGlobal Tele. Ltd. Enquiry officer submittedthe report on December 8, 2005,recommending suspension of certificateof registration of the broker for a period ofthree months. Post enquiry SCN wasissued to the broker on December 14,2005 and reply received on December 27,2005. Further action is in progress.

Adani Exports Ltd.Show Cause notice was issued earlier to7 promoter entities of Adani Exports Ltd.viz. Adani Agro Ltd., Adani Impex Ltd.,Shahi Property Developers Ltd., Adani


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· M/s. Aspolite Barter Pvt. Ltd.· M/s. Naina Barter Pvt. Ltd.· Shri Ashok Sharma

Show Cause Notices could be served only to two promoter groupentities, namely, DSQ Holdings Ltd. and Dinesh Dalmiya. Replyto the show cause notice is yet to be received. Exparte order willbe passed after giving one more opportunity. Show Cause Noticessent by courier and subsequently by speed post to the remainingsix entities, namely, Hulda Properties and Trades Ltd., CooltexCommodities Ltd., Arun Polymers Ltd., Aspolite Barter Pvt. Ltd.,Greenfield Investments Pvt. Ltd. and Ashok Sharma returnedundelivered. Show Cause Notices could not be served to theseentities. Exparte order will be passed after giving one moreopportunity.Other EntitiesA show cause notice dated February 19, 2004 was issued to thefollowing entities under Regulation 11 and 11B of SEBI Act readwith Regulation 11 of SEBI (Prohibition of Fraudulent and UnfairTrade Practices) Regulations, 1995

· M/s. Arihant Exim Scrip Pvt. Ltd.· M/s. Doe Jones Investments & Consultants Pvt. Ltd.

Reply to the Show Cause Notices has not yet been received.Letter has been received from the entity mentioning that theyare not in a position to reply because police authorities haveseized the documents. Exparte order will be passed.A show cause notice dated February 19, 2004 was issued foracquisition of shares/voting rights/control of DSQ Industries Ltd.(DSQ) by Classic Credit Ltd. and Panther Fincap & ManagementServices Ltd. in violation of SEBI (Substantial Acquisition ofShares and Takeovers) Regulations, 1997 (Regulations). Replyto the Show Cause Notice has not yet been received. Expartefinal order will be passed after giving one more opportunity.Prosecution No.4538 has been filed on August 13, 2003 (ChiefMetropolitan Magistrate’s Court at Kolkata) against Doe JonesInvestments Ltd., Arihant Exim Pvt. Ltd., M. Tibrewal & Co., andpromoter group entities and associates of DSQ Industries Ltd.namely DSQ Holdings Ltd., Hulda Properties and Trades Ltd.,Cooltex Commodities Ltd., Greenfield Investments P Ltd., ArunPolymers P Ltd., Aspolite Barter, Naina Barter, Dinesh Dalmiaand Ashok Sharma.

Properties Ltd., Advance Exports Ltd.,Intercontinental India, Crown Internationaland they replied to the SCN vide letterdated December 19, 2005.

An opportunity of personal hearing wasgranted to 7 promoters entities of AdaniExports Ltd. viz. Adani Agro Pvt. Ltd.,Adani Impex Pvt. Ltd., Shahi PropertyDevelopers Pvt. Ltd., Adani Properties Pvt.Ltd, Advance Exports, IntercontinentalIndia and Crown International by WholeTime Member of SEBI on March 14, 2006.Vide letter dated March 12, 2006, ShriRajesh Adani, on behalf of the saidentities, requested for an extension of timeof at least one month for the personalhearing. Further action is in progress.

An opportunity of personal hearing wasgranted to Abhinav Investments by WholeTime Member of SEBI on March 14, 2006.Abhinav Investment requested for anextension of time.

Common enquiry had been initiatedagainst Hem Securities Ltd. for trading inthe scrip of HFCL, Adani Exports Ltd. andGlobal Tele Ltd. Enquiry officer submittedthe report on December 8, 2005,recommending suspension of certificateof registration of the broker for a period ofthree months. Post enquiry SCN wasissued to the broker on December 14,2005 and reply received on December 27,2005. Further action is in progress.


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Enquiry Proceedings have been Initiated against followingBrokers

1. M/s. SMIFS Securities Ltd.2. M/s. Titan Stock Broking Pvt. Ltd.

3. M/s. Indsec Securities Ltd.4. M/s. Amartlal Gopalji Thacker

5. M/s. Mehta & Ajmera6. M/s. Bissen Dayal Dayaram

7. M/s. Ballabh Dass Daga8. M/s. Vishal J Shah

9. M/s. Niraj BalasariaOut of the nine brokers, enquiries have been completed against

3 brokers and final show cause notices have been issued tothem on April 29, 2004:

1. Titan Stock Broking2. Amritlal Gopalji Thacker

3. M/s Niraj BalsariaPadmini Technologies Ltd. (PTL)

Against PTL and its whole-time directorsProsecution launched u/s 113(2) of Companies Act against the

company and its whole-time directors in the Court of Addl. ChiefMetropolitan Magistrate, Tis Hazari, Delhi vide case no. 252 of

2003 on March 26, 2003. The criminal case came up before thecourt on 20.11.03. Last hearing took place in March 2004, when

all the accused appeared. The case has been posted to 16.08.04.Prosecution u/s 24 and 27 of SEBI Act r/w Regulation 3, 4 & 6 of

SEBI (Prohibition of Fraudulent and Unfair Trade Practicesrelating to Securities Market) Regulations, 1995 and Regulation

3(1)(c), 3(3), 7 of SEBI (Substantial Acquisitions of Shares andTakeovers) Regulations 1995 against PTL and its whole-time

directors launched on 28.05.04.Prosecution {u/s11C(6) of SEBI Act} against Shri Vivek Nagpal,

CMD, PTL launched on 28.05.04.Adjudication (u/s 15A of SEBI Act) for non compliance of

summons initiated against Shri Vivek Nagpal and PTL on12.12.03 and 13.02.04 respectively, show cause notices (SCNs)

to Vivek Nagpal and PTL issued on 03.02.04 and 24.02.04

Himachal Futuristic CommunicationsLtd. (HFCL)Common enquiry had been initiatedagainst Hem Securities Ltd. for trading inthe scrip of HFCL, Adani Exports Ltd andGlobal Tele Ltd. Enquiry officer submittedthe report on December 8, 2005,recommending suspension of certificateof registration of the broker for a period ofthree months. Post enquiry SCN wasissued to the broker on December 14,2005 and reply received on December 27,2005. Further action is in progress.

An opportunity of personal hearing wasgranted to the broker Hem Securities Ltd.by Whole Time Member of SEBI on March17, 2006 for trading in the scrip of HFCL,Adani Exports Ltd. and Global Tele Ltd.The broker requested for a postponementof the personal hearing. Further action isin progress.

Hearing was granted to the broker PravinV Shah Stock Broking Pvt. Ltd. by WholeTime Member of SEBI on January 19,2006 in the matters of Global Tele Ltd.,Adani Exports Ltd. and HimachalFuturistic Communication Ltd. Furtheraction is in progress.

Hearing was granted to Chandravadan JDalal by Whole Time Member of SEBI onFebruary 2, 2006 in the matters of GlobalTele Ltd., Adani Exports Ltd. and HimachalFuturistic Communication Ltd. Furtheraction is in progress.


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respectively, reply from Vivek Nagpal received vide letter dated17.03.04.Proceedings u/s11B of SEBI Act are under way; show causenotice has been issued to the company and its directors on20.02.04. PTL and Vivek Nagpal have raised issues likeinspection of records, depositions, cross examination etc. videtheir letters dated 28.02.04 and 25.03.04 respectively.Reference has been made to Department of Companies Affairs(DCA) on 09.01.04 for considering appropriate action under therelevant provisions of the Companies Act for irregularitiescommitted in regard to preferential allotment.Against Ketan Parekh groupPanther Fincap and Management Services Ltd., ClassicCredit Ltd. and their Directors (including Ketan Parekh)Adjudication proceedings u/s 15H of SEBI Act have been initiatedon 13.02.04, SCNs were issued on 24.02.04, replies receivedon 18.03.04 are under consideration of the Adjudicating Officer.KP entities have been debarred from capital market vide orderdated 12/12/2003 for fourteen years.Prosecution u/s 24 and 27 of SEBI Act r/w Regulation 3, 4 & 6 ofSEBI (Prohibition of Fraudulent and Unfair Trade Practicesrelating to Securities Market) Regulations, 1995 and Regulation3(1)(C), 3(3), 7 of SEBI (Substantial Acquisitions of Shares andTakeovers) Regulations 1995 and u/s 23(1)(b) of SecuritiesContract Regulation Act launched on 28.05.04.Triumph International Finance LtdEnquiry proceedings under SEBI (Procedure for Holding Enquiryby Enquiry Officer and Imposing Penalty) Regulations, 2002 havebeen initiated on 16.12.03, SCN issued on 10.03.04, replyreceived on 25.03.04 are under consideration of the EnquiryOfficer.Against Statutory AuditorsReference has also been made to Institute of CharteredAccountants of India on 23.12.03.Proceedings u/s 11B of SEBI Act have been initiated against thestatutory auditor and show cause notice has been issued on22.12.03.Prosecution u/s 24 of SEBI Act has been launched on 28.05.04.

Hearing was granted to the broker VidyutDevendra Kumar by Whole Time Memberof SEBI on January 19, 2006 in the matterof Himachal Futuristic CommunicationLtd. Further action is in progress.

Against Ketan Parekh GroupAn opportunity of combined personalhearing for all pending cases was grantedby Whole Time Member of SEBI to 20persons/entities of the Ketan Parekh (KP)Group on March 7, 2006. The KP Group,vide letters dated March 2, 2006 andMarch 3, 2006 raised technical and legalissues including asking for copies ofdocuments and cross examination ofentities which are being examined. Freshdate of hearing is yet to be given.Cyberspace Ltd.

1. Final order was passed in thematter of M/s Mangla CapitalServices Ltd. on January 31, 2006imposing a minor penalty ofCensure

2. Warning letters have been issuedto 10 broking entities. The sameare in the process of being issuedin case of other two entities.

3. Show Cause Notice to Ms.Vandana Srivastava u/s 11(4)read with Section 11B of the SEBIAct, 1992 has been served on her.

4. Enquiry proceedings against 7broking entities and one sub-broker are being initiated.

M/s SSI Ltd.Pursuant to the submission of enquiryreport by the Enquiry Officer, a postenquiry Show Cause Notice was issued


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Against OthersVarious preferential allottees and their associatesProceedings u/s11B of SEBI Act are under way.Sanjay Kumar, Chartered AccountantAdjudication (u/s 15A of SEBI Act) for non compliance ofsummons initiated on 12.12.03. SCN issued on 03.02.04, replyreceived on 01.03.04 under consideration of the Enquiry Officer.SCN issued on 26.12.03 as part of proceedings u/s11B of SEBIAct, inspection of records granted on 19.02.04. He has furtherrequested for copies of various documents which is underconsideration.Prosecution u/s 11C(6) and 24 of SEBI Act has been launchedon 28.05.04.Reference has been made to The Institute of CharteredAccountants of India (ICAI) on 26.12.03.SBI Mutual FundReference has been made to Trustees of SBI Mutual Fund on18.12.03 requesting them to look into the issues raised by SEBI.A & A Finvest P Ltd. (a sub-broker)Enquiry proceedings have been initiated. SCN issued on15.03.04, reply received vide letter dt. 28.04.04 underconsideration of Enquiry Officer.Shonkh Technologies LtdAgainst Mr. Vivek Nagpal, promoters of M/s ShonkhTechnologies International LimitedAdjudication orders levying a penalty of Rs.1 Crore each waspassed on December 3, 2003 against Shri Vivek Nagpal and M/sPadmini Technologies. On an appeal filed by the above entities inSAT, SAT directed them to deposit Rs.1.5 lakhs each with SEBI.Rs.1.5 lakhs each was deposited by the parties with SEBI onMay 19, 2004.Against Shonkh Technologies International LimitedShow cause notice is to be issued by May 31, 2004.Prosecution proceedings are under consideration.Against Ketan Parekh EntitiesOrder against the KP entities prohibiting the KP entities from buying,selling or dealing in securities in any manner, directly or indirectlyand debarring them from associating with the securities markets,for a period of 14 years was passed on December 12, 2003.

to M/s. Milan Mahendra Securities Pvt.Ltd. on March 06, 2006.

Ranbaxy Laboratories LimitedAgainst promoters group entities/Companyi) 11B action against Vidyut Investments.The entity was asked to appear before theWhole Time Member, SEBI for personalhearing on February 14, 2006. During thepersonal hearing, the Member asked theentity to submit certain documentaryevidence by March 10, 2006. Replyreceived is under examination.

Against Stock BrokersKP entitiesPost enquiry show cause notices wereissued (on January 30, 2006) to five KPentities namely Triumph InternationalFinance Ltd., Triumph Securities Ltd., V.N.Parekh Securities Pvt. Ltd., KNPSecurities Pvt. Ltd. and N.H. SecuritiesPvt. Ltd. The replies are awaited.


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The certificate of registration granted to broking entitiesassociated with/controlled by Ketan Parekh viz, Classic Sharesand Stock Broking Services (CSSB), Triumph Securities Limited(TSL), NH Securities Ltd. (NH Sec.), Triumph InternationalFinance India Ltd., V N Parekh Securities Limited (VNP Sec)and KNP Securities Limited (KNP Sec) was cancelled on March8, 2004.Against M/s Iris Infrastructurals Private LimitedPenalty of Rs.1.5 lac was imposed on April 22, 2003 and Rs.1crore on December 3, 2003. The penalty amount is yet to bereceived. Recovery proceedings initiated.Against BrokersMilan Mahendra Securities Ltd.Show cause notice has been issued to the broker and reply hasbeen received.Adjudication proceedings have been completed against the entityand penalty imposed. Enquiry has been initiated against thebroker. Hearing in the case of M/s Milan Mahendra SecuritiesPrivate Limited stands rescheduled for June 14, 2004.Extempore Securities & Investments Ltd.(now called PioneerEquity Trade (India) Pvt. Ltd.)Show cause notice has been issued and reply received from theentity.Adjudication proceedings have been completed and penaltyimposed on the entity. The entity has paid the penalty.Enquiry proceedings have been completed and warning order waspassed on February 4, 2004 against M/s Extempore Securities(name changed to M/s Pioneer Equity Trade (India) Pvt. Ltd.Agroy Finance and Investments LimitedEnquiry proceedings have been initiated against the broker.A. Nitin Capital Services LimitedEnquiry proceedings have been initiated against the broker.Delhi Securities LimitedEnquiry proceedings have been initiated against the broker.Show cause notice under issue.Adjudication proceedings have been initiated against the entities.M/s Money Growth Financials and Consultants PrivateLimitedShow cause notice are to be issued by June 10, 2004.


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M/s A. Jain & Co. – Member DSEEnquiry Proceedings have been initiated against the broker.Shamit Finvest Private LimitedShow cause notice are to be issued by June 10, 2004.Investment by UTI in the shares of ShonkhInvestigation report received from UTI. UTI decided to initiateDepartmental and criminal action as may be appropriate againstthose indicted in the report.Ranbaxy Laboratories Ltd.Against promoterAdjudication proceedings for alleged contravention of section15A(a) of the SEBI Act read with Regulation 3(4) of the SEBI(Substantial Acquisition of Shares and Takeover) Regulations,1997 were initiated on 24.10.02 against the following 12 promotergroup entities of Ranbaxy Laboratories Ltd.:1. Astral Investments & Trading Company Pvt. Ltd.2. Divya Papers Pvt. Ltd.3. Shimal Investment & Trading Company4. Oscar Holdings Pvt. Ltd.5. Delta Aromatics Pvt. Ltd.6. Modland Wears Pvt. Ltd.7. Jupiter Investments Pvt. Ltd.8. Malvinder Mohan Singh9. Oscar Pharmaceuticals Pvt. Ltd.10. Oscar Investments Ltd.11. Fortis Financial Services Ltd.12. Dr. Parvinder Singh (HUF)Show cuase notices were issued on 10.11.2003.Against Stock BrokersEnquiry proceedings for alleged violation of the provisions of theSEBI (Prohibition of Fraudulent and Unfair Trade Practicesrelating to Securities Market) Regulations, 1995, SEBI (StockBrokers and Sub-Brokers) Regulations, 1992 and rulesregulations and bye-laws of stock exchanges, were initiated on24.10.02 against the following 41 stock brokers of different stockexchanges:1. Credit Suisse First Boston (India) Securities Pvt. Ltd.2. KNP Securities Pvt. Ltd.3. V.N. Parekh Securities Pvt. Ltd.


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4. Triumph Securities Ltd.5. Chandravadan J. Dalal6. Milan Mahendra Securities Pvt. Ltd.7. Mukesh Babu Securities Ltd.8. Bakliwal Securities Pvt. Ltd.9. M.P. Vora Shares & Securities Pvt. Ltd.10. Active Finstock Pvt. Ltd.11. Triumph International Finance India Ltd.12. NH Securities Ltd.13. Khandwala Integrated Financial Services Pvt. Ltd.14. Prashant Jayantilal Patel15. Wallfort Financial Services Ltd.16. Suresh Chand S Jain17. The First Custodian Fund (India) Ltd.18. Mahesh Kumar Damani19. Salasar Stock Broking Ltd.20. Dinesh Kumar Singhania & Co.21. Agbros Securities Pvt. Ltd.22. Ashok Kumar Poddar23. Prema Poddar24. Shyam Sundar Dalmia25. Sanjay Khemani26. Shankarlal Chokhany27. Shruti Mohta28. Kanodia Stock Broking (Pvt.) Ltd.29. J.V.S. Securities Pvt. Ltd.30. Kamal Kumar Dugar & Co.31. Lalit & Co.32. M/s Loknath Saraf33. S.P. Rakhecha & Co.34. Shree Harivansa Securities Pvt. Ltd.35. BLB Share & Financial Services Ltd.36. Dalmia Securities (P) Ltd.37. Herald Equities Pvt. Ltd.38. Naresh Chand Chandak39. Rajendra Kumar Chokhany40. Somani Stock Broking Pvt. Ltd.41. Tackel Stock Broking Services Pvt . Ltd.


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In the case of enquiry against Credit Suisse First Boston (India)Securities Pvt. Ltd., SEBI has passed an order dated March 05,2004, under Regulation 13(4) of the SEBI (Procedure for HoldingEnquiry by Enquiry Officer and Imposing Penalty) Regulations,2002, suspending the certificate of registration of the brokingentity for a period of one month. The order came into effect afterthree weeks from the date of the order.In the cases of enquiry against Bakliwal Securities Pvt. Ltd., M.P.Vora Shares & Securities Pvt. Ltd. and Active Finstock Pvt. Ltd.no action has been recommended in the enquiry report.Enquiry proceedings in the remaining cases are under progress.Against Ketan Parekh EntitiesAgainst the following 5 broking entities belonging to Ketan Parekhgroup, SEBI has passed orders dated 08.03.2004 canceling theircertificate of registration:

1. KNP Securities Pvt. Ltd.2. VN Parekh Securities Pvt. Ltd.3. Triumph Securities Ltd.4. Triumph International Finance India Ltd.5. NH Securities Ltd.

Against the following 3 CSE brokers, their registration has alreadybeen cancelled by SEBI.

1. Dinesh Kumar Singhania – vide order dated12.10.2001

2. Ashok Kumar Poddar – vide order dated 24.06.20023. Prema Poddar - vide order dated 24.06.2002.

In the case of another CSE broker, namely, Loknath Saraf, noenquiry could be proceeded as the broker had expired.Against 4 brokers, namely, Bakliwal Securities Pvt. Ltd., M.P.Vora Shares & Securities Pvt. Ltd., Active Finstock Pvt. Ltd. andKhandwala Integrated Financial Services Pvt. Ltd., in the enquiryreports submitted by the Enquiry Officer, no action against thebrokers have been recommended by the Enquiry Officer.Names of the entities against whom prosecution proceedingswere under consideration are as follows:

1. Shri Ketan Parekh2. KNP Securities Pvt. Ltd.3. V.N. Parekh Securities Pvt. Ltd.4. Triumph Securities Ltd.


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5. NH Securities Ltd.6. Classic Credit Ltd.7. Panther Fincap and Management Services Ltd.8. Sai Mangal Investrade Ltd.9. Luminant Investments Pvt. Ltd.10. Panther Investrade Ltd.11. Upfront Investments12. Profile Investment13. Options Investments14. Ace Investment15. Linear Investments16. Online Investments17. A B Corporation18. Jayant N. Parekh

Out of the above entities, prosecutions have been filed on March7, 2003 vide case no 123/2003 in the court of Addl. ChiefMetropolitan Magistrate, 8th Court, Esplanade, Mumbai againstthe following entities connected/associated with Ketan Parekh.

1. Shri Ketan Parekh2. NH Securities Ltd.3. Classic Credit Ltd.4. Panther Fincap and Management Services Ltd.5. Sai Mangal Investrade Ltd.6. Luminant Investments Pvt. Ltd.7. Panther Investrade Ltd.

Prosecution proceedings against the remaining entities areunder consideration.

The dealings of Centurion Bank Ltd. in the scrip by way ofarbitrage/trading transactions through the brokers connected/associated with the Ketan Parekh entities during this period whichare in violation of RBI guidelines, have been referred to RBI forsuitable action vide letter dated November 12, 2002.Global Trust Bank Ltd.A show cause notice dated October 21, 2003 was issued to thefollowing entities under Regulation 11 of SEBI (Prohibition ofFraudulent and Unfair Trade Practices) Regulations, 1995 readwith Section 11 and 11B of SEBI Act, 1992. Final order has beenpassed on 23.03.2004 debarring Sh. Ramesh Gelli, Ms. Premkala


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Gelli etc. from dealing in the scrip of GTB for 18 months.Enquiry against the following brokers has been completed andshow cause notices issued on dates mentioned against them:1. SS Corporate Securities Ltd. – March 31, 20042. Visaria Securities (P) Ltd. – May 26, 20043. SBM Investments Ltd. – May 26, 20044. Wood Stock Securities (P) Ltd. -March 31, 20045. Wood Stock Broking (P) Ltd. – March 31, 20046. Ind Sec Securities and Finance Ltd.-Feb.5, 20047. ICICI Brokerage Services (P) Ltd.- Feb.5, 20048. CSFB Securities (P) Ltd. – February 5, 20049. Mukesh Babu Securities (P) Ltd.-Feb. 5, 2004In the case of SS Corporate Securities Ltd., hearing is scheduledto take place on June 7, 2004.Reply to the SCN has not yet been received from VisariaSecurities (P) Ltd. and SBM Investments Ltd.Reply to the SCN has not yet been received from Wood StockSecurities (P) Ltd. and Wood Stock Broking (P) Ltd. Thesebrokers have sought more time to furnish the reply. In the cases of Ind Sec Securities and Finance Ltd., ICICIBrokerage Services (P) Ltd. and Mukesh Babu Securities (P)Ltd., hearing took place before the Chairman, SEBI on March12, 2004.In the case of CSFB Securities (P) Ltd., hearing took place beforethe Chairman, SEBI on May 12, 2004.Aftek InfosysActions against promotersDebarred from dealing in securities for 1 year vide Order dated8/3/2004.Zee TelefilmsActions against promotersFor the breach of the provisions of SEBI (Substantial Acquisitionof Shares and Takeovers) Regulations, 1997, penalty of Rs.60,000 was imposed on 19.08.02 and paid on 12.02.2003.Global TeleActions against promotersFor the breach of the provisions of SEBI (Substantial Acquisitionof Shares and Takeovers) Regulations, 1997, penalty of Rs.1,20,000 was imposed on 17.3.03 and paid.


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Pentamedia GraphicsActions against promotersFor the breach of the provisions of SEBI (Substantial Acquisitionof Shares and Takeovers) Regulations, 1997, penalty of Rs.90,000 was imposed on 2.5.03 and paid.Adani Exports LtdActions against promotersFor the breach of the provisions of SEBI (Substantial Acquisitionof Shares and Takeovers) Regulations, 1997, penalty of Rs.60,000 was imposed on 7.4.03 and paid.Lupin Lab. PromotersActions against promotersThe investigation in the case of violation of Securities ContractsRegulations by the Lupin Lab promoters is complete.KP entities barred from capital market vide order dated 12/12/03for 14 years. The registration certificates granted to these entitieshave been cancelled.Criminal complaint filed against various entities indulged in marketmanipulation on 07/03/03.Action against other entities in the above six casesEntities associated with /controlled by Ketan ParekhFollowing persons/ entities have been prohibited from buying,selling or dealing in securities in any manner directly or indirectlyand also debared them from associating with the securitiesmarket, for a period of fourteen years.

1. Shri Ketan V. Parekh2. Kartik K. Parekh3. Classic Credit Ltd4. Panther Fincap and Management Services Ltd.5. Luminant Investment Pvt Ltd.6. Chitrakut Computers Pvt. Ltd.7. Saimangal Investrade Ltd.8. Classic Infin Ltd9. Panther Investrade Ltd.

Other brokersi. CSFB Securities-Suspended for two yearsii. Chardravadan J. Dalal- Suspended for two yearsiii. Latin Manharlal Securities Ltd- Suspended for six monthsiv. Quasi-judicial proceedings against 18 brokers are in

progress.


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Cyberspace Ltd.Investigations into trading in the scrip have been completed.· Adjudication proceedings against the said company and their

promoters have been initiated on 16.4.2004 for their noncompliance with the summons issued by SEBI.

· Prosecution has also been launched against the companyand its promoters in August 2003 for violation of SEBI(PFUTP) Regulations.

· Directions have been issued to M/s Prabodh Arth Sanchay,a related entity of M/s Cyberspace Ltd. directing them to becareful in future while trading.

· Enquiry proceedings against M/s. Century Consultants Ltd.(a BSE and NSE member) for violation of Code of Conductlaid down under Regulation 7 of the SEBI (Stock Brokersand Sub-Brokers) Regulations, 1992 completed. Thecertificate of registration of the broker has already beencancelled by the BSE, NSE and SEBI.

· Directions have been issued to Shri Shashikant G. Badanito restrain from associating with any corporate body inaccessing the securities market and prohibited him frombuying, selling or dealing in securities, directly or indirectly,for a period of one year.

· The matter of issuing directions to Shri S. K. Barasia underthe provisions of the SEBI Act and Rules and Regulationsmade thereunder is under process.

· Action for issuing directions u/s 11 (4) of the SEBI Act against19 associate/shell companies which were found to have aidedand abetted the company in the manipulation of the scripare in the process of being issued. Similar directions againstM/s. Cyberspace Ltd., M/s. Century Consultants Ltd. andtheir promoters are also in the process of being issued.

Silverline Technologies Ltd.Investigations into the price movement in the scrip of SilverlineTechnologies Ltd. have been completed. In the course ofinvestigations, adjudication proceedings u/s 15 A were initiatedagainst the company as well as its promoters for non-complianceof SEBI summons. The Adjudicating Officer vide his Orders dated10/10/2003 and 24/10/2003 has levied monetary penalties ofRs.19,00,000 and Rs.21,00,000 on the company and itspromoters respectively for this default. As no penalty has been


17

paid, recovery proceedings have been initiated. SAT vide itsorder dated January 20, 2004 has directed the parties to pay thepenalty amount.Since the company is also listed on NYSE, SEBI has informedthe NYSE as well as the SEC about the violations of IndianSecurities Laws committed by the company.Enquiry proceedings against the following 5 brokers have beeninitiated on 11.3.2004:1. M/s Latin Manharlal Securities (P) Ltd2. M/s Milan Mahendra Securities (P) Ltd3. M/s Triumph International Finance Ltd4. M/s Classic Shares and Stock Brokers Ltd5. M/s Triumph Securities Ltd.Similarly, adjudication proceedings u/s 15 A read with Section 15HB of the SEBI Act have been initiated against the following 3out of the above 5 broking entities for their failure to comply withthe summons issued by SEBI:1. M/s Latin Manharlal Securities (P) Ltd –

11/3/042. M/s Milan Mahendra Securities (P) Ltd –

11/3/043. M/s Subhkam Securities (P) Ltd - 15/3/04Three warning letters have been issued:(i) M/s Subhkam Securities (P) Ltd. – 17.5.04(ii) JP Morgan India (P) Ltd. – 16.3.04(iii) Kotak Securities – 16.3.04.SSI Ltd.Investigations into the trading in the scrip of SSI Ltd. have beencompleted. The promoters of SSI and 3 individuals are found tohave violated the provisions of Sections 13, 16 read with Section2(i) of the SCRA read with notification dated March 1, 2000.Prosecution proceedings u/s 23(1) (b) of the SCRA are beinginitiated against the concerned parties. Reference is also beingmade to CBDT to look into the aspect of evasion of tax (CapitalGains on sale of shares by promoters etc.) involved in the matter.Investigations have also revealed that the following 4 brokingentities (including those belonging to KP) had indulged in tradeswith a view to creating artificial volumes thereby violating theSEBI (PFUTP) Regulations:


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1. M/s Triumph Securities Limited2. M/s Triumph International Finance Ltd.3. M/s Classic Shares and Stock Brokers Ltd.4. M/s Milan Mahendra Securities (P) Ltd

Enquiry proceedings were initiated on 2.4.2004.

Adjudication proceedings u/s15A read with Section 15HB of theSEBI Act have been initiated on 2.4.2004 against M/s MilanMahendra Securities (P) Ltd. and M/s Triumph InternationalFinance Ltd. for their failure to comply with the summons issuedby SEBI.Reference to prosecution has been made against six individuals:

1. K.S. Aghoram2. K.S.Ganesh3. K.S. Suresh4. V.Kalaiselvi5. K.V.Prakash6. S.Venkatesh

Out of 15 corporates referred in Chapter VII of JPC Report,corporates/promoter–brokers (KP entities) nexus has beenestablished in 7 cases. SEBI has debarred/initiated proceedingsagainst these companies/promoters from accessing the capital/dealing in securities and also filed prosecution. The certificatesof registration granted to 6 of the broking entities associated withKetan Parekh were cancelled by SEBI. Ketan Parekh and 8entities related to him were also debarred from dealing insecurities market in any manner for a period of 14 years andprosecution have also been filed against these entities. SEBIhas also suspended the certificates of other Brokers who haveaided and abetted Ketan Parekh entities in market manipulations.As reported in December, 2004DSQ SoftwareAction against promotersSEBI has issued the following directions vide two Orders dated9.9.04 to (1) DSQ Software Ltd., and Shri Dinesh Dalmia (2)Other directors of the company with immediate effect.Shri Dinesh Dalmia is prohibited from buying, selling or otherwisedealing in securities in any manner, directly or indirectly, for aperiod of 10 years and is also prohibited from holding any officeof responsibility in a company/entity or other institution associatedwith the securities market for a period of 10 years.


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DSQ Software Limited is prohibited from accessing the securitiesmarket and buying, selling or otherwise dealing in securities inany manner, directly or indirectly in securities for a period of 10years.Shri Dinesh Dalmia and DSQ Software Ltd. shall deposit a sumof Rs.630 crore (being the value of 1.30 crore shares calculatedby taking into account the average price of the scrip in the relevantsettlement) within a period of 45 days in a separate escrowaccount to be maintained with a nationalized bank, till completionof investigation by various Police agencies including CalcuttaPolice and Central Bureau of Investigation.Shri Dinesh Dalmia shall buy 1.30 crore shares of DSQ SoftwareLtd, circulated into the secondary market within a period of 45days and retain the same in a separate demat account to beopened for the purpose, till permission for reduction in capital isobtained by the company from the competent authority.The amounts deposited in the escrow account and sharesretained in the demat account shall not be withdrawn withoutprior permission in writing from SEBI.Mohammed Ghulam Ghouse, B.K. Pal, K.M. Venkateshwaran,and Brig. (Retd.) V.M. Sundaram directors of DSQ Software duringthe material period are prohibited from buying, selling or dealingin securities, in any manner, directly or indirectly for a period of 5years and also prohibited from holding any office of responsibilityin a company/entity or other institution associated with the securitiesmarket for a period of 5 years.Shri Dinesh Dalmia, DSQ Software Ltd. and other directors viz.Mohammed Ghulam Ghouse, B.K. Pal, K.M. Venkateshwaranand Brig. (Retd.) U.M. Sundram have filed appeal against theabovesaid two SEBI orders dated 9.9.2004 at Securities andAppellate Tribunal (SAT). The appeal has been admitted andthe hearings will commence from 24.11.2004.Adjudication against the following entities are completedand penalty collected:

Name of entities Penalty levied Collection detailsDinesh Kumar Rs.25,000 Collected in theSinghania month of August 2004Arihant Exim Scrip Rs.15,000 Collected in the monthPvt. Ltd. of August 2004


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SEBI vide Order dated 4.10.04 prohibited the following entities/persons from accessing the securities market and dealing insecurities for a period of 10 years with immediate effect:a) New Vision Investment, UK,b) Dinesh Dalmia Technology Trust,c) Softec Corporation Trust,d) New Vision Investment Private Ltd.,e) DSQ Holdings Ltd.,f) Hulda Properties & Trades Ltd.,g) Powerflow Holdings Pvt. Ltd,h) DSQ Industries Ltd. andi) Mrs. Radha DalmiaAction against the following broker has been taken who hadindulged in synchronized transactions in the shares of DSQSoftware Ltd.

Name Broker SEBI Order Date Suspension period& w.e.f.

Millennium 13.09.04 w.e.f. 6 monthsEquities Ltd. 04.01.2004DSQ Industries Ltd.Against promotersFinal Order is being issued.Other EntitiesFinal Orders against Arihant Exim Scrip Pvt. Ltd. and Doe JonesInvestments and Consultants Pvt. Ltd. are being issued.Ketan Parekh entities have been banned for a period of 14 yearsfor dealing in securities market for market manipulation in variousscrips.Prosecution has been filed.Enquiry proceedings against the BrokersEnquiry has been completed against 5 broking entities namely,1. Amrut Gopalji Thacker2. Titan Stock Broking3. Niraj Balasaria4. SMIFS Securities Ltd.5. Mehta & Ajmera (Already suspended for one year on 4.3.04)Final Orders are being issued.


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Padmini Technologies Ltd. (PTL)Against PTL and its whole time directorsAdjudication proceedings (u/s 15A of SEBI Act) initiated for noncompliance of summons have been completed and AdjudicationOfficer, vide his order dt. August 16/17, 2004, has imposed apenalty of Rs.5 lacs and Rs. 3 lacs on PTL and Shri Vivek Nagpalrespectively.Proceedings u/s11B of SEBI Act are under way; show causenotice has been issued to the company and its directors. Personalhearing which was scheduled for 11.11.04 was not availed.Another opportunity for personal hearing is scheduled for30.11.2004.Against Ketan Parekh groupPanther Fincap and Management Services Ltd., ClassicCredit Ltd. and their Directors (including Ketan Parekh)Adjudication proceedings have been completed and AdjudicationOfficer, vide his orders dated 23/24.08.04, has imposed a penaltyof Rs.5 lac each on Panther Fincap and Management ServicesLtd. and Classic Credit Ltd.Triumph International Finance Ltd.Enquiry Officer vide his report dated 23.8.04 has recommendedcancellation of registration. Show cause notice based on theEnquiry Officer’s report was sent on 27.8.04. No reply has beenreceived so far. An opportunity for personal hearing is proposed.It may be noted that the registration of Triumph International hasalready been cancelled vide an earlier order dated 16.5.2003.Against Statutory AuditorsThe auditor was given opportunities of personal hearing on24.08.04, 17.09.04 and 20.10.04 which were not availed. FinalOrder is being issued.Against OthersSanjay Kumar, Chartered AccountantAdjudication proceedings (u/s 15A of SEBI Act) initiated for noncompliance of summons have been completed and AdjudicationOfficer, vide his order dated 18.08.04, has imposed a penalty ofRs.2 lac on Shri Sanjay Kumar.As regards the show cause notice issued on 26.12.03 as part ofproceedings u/s11B of SEBI Act, another inspection of recordswas granted on 02.08.04. He has further requested for copies of


22

various documents which have been provided. He was asked tosubmit his reply by 4.10.04. No reply has been received. Ex-parte order is being processed.SBI Mutual FundReference has been made to Trustees of SBI Mutual Fund on18.12.03 requesting them to conduct a thorough investigationon the issues raised by SEBI and submit a report thereof.Reminder was issued to the Trustees on 28.5.04, who havereplied vide letter dated 09.06.04 that a firm of reputed charteredaccountants have been appointed to look into the matter. Theauditors report has been received from the Trustees on 24.09.04which is under examination.SEBI inspection of systems and procedures of SBIMF conductedon 29/30.01.04. Systemic deficiencies observed during inspectionwere communicated to AMC vide letter dated 07.05.04 for takingcorrective action.A & A Finvest P Ltd. (a sub-broker)Enquiry proceedings under SEBI (Procedure for Holding Enquiryby Enquiry Officer and Imposing Penalty) Regulations, 2002 havebeen completed and Enquiry Officer vide his report dated13.08.04, has recommended for suspension of registration for aperiod of one year. Show cause notice based on Enquiry Officer’sreport has been issued on 27.08.04, reply received on 13.09.04.An opportunity of personal hearing is being given before passingthe order.Shonkh Technologies Ltd.Against promotersShow Cause Notices issued to the promoters and associated entities(15 entities) of Shonkh Technologies International Limited. Personalhearings before Chairman initiated. Hearing on two differentoccasions had to be postponed on the request of the parties. Thirddate fixed on 2.12.04.Against Mr.Vivek Nagpal and promoters of ShonkhTechnologies International Ltd.Adjudication orders levying a penalty of Rs.1 crore each againstShri Vivek Nagpal and Padmini Techologies Ltd. have beenpassed. Against the Adjudication Orders, Shri Vivek Nagpal andPadmini Technologies Ltd. have filed an appeal before SAT andas per the interim orders of SAT they have paid a penalty ofRs.1,50,000 each.


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Adjudication against associated entities of the company/promotersAgainst 16 entities penalty of Rs. 1 crore each was levied by theAdjudicating Officer.One entity (Shri Mukesh Malhotra) has appealed before SATagainst the adjudication order. SAT directed Shri MukeshMalhotra to deposit Rs.25,000/- with SEBI and co-operate withSEBI in the case. Payment is yet to be received. Legal action forrecovery is being processed.Action against othersShow cause notices issued against Money Growth Investmentand Consultants Pvt. Ltd., dated 26.9.04 and Shamit Finvest Pvt.Ltd. dated 24.9.04. Replies are yet to be received.Order against broker Millenium Equities (India) PrivateLimited:Order passed suspending the certificate of registration of the brokerfor a period of six months.Ranbaxy Laboratories Ltd.Adjudication proceedings against the 12 promoter groupentities.Orders exonerating the 12 promoter group entities have beenpassed by the Adjudicating Officer on 9.9.04.Other broking entities16 brokers - Final orders issued.24 broking entities – Ex-parte orders will be prepared by midDecember 2004.One broking entity – (Mukesh Babu Securities Ltd.- ordersuspending the broker for one year passed in the case of GTB.Separate enquiry proceedings initiated in this scrip and also inHFCL, Zee and GTL.)Global Trust Bank Ltd.Against the brokersEnquiry and other proceedings against the brokers:* Order has been passed against ICICI Brokerage Services

Ltd. discharing the broker from the irregularities on 9.9.04.* Order passed against M/s. Indec Securities and Finance Ltd.,

warning the broker to be more careful in future vide orderdated 10.9.04.

* Order passed against M/s. Mukesh Babu Securities Pvt. Ltd.


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suspending the registration for a period of one year vide orderdated 14.10.04.

* Order passed against M/s. Woodstock Securities Ltd.,Woodstock Broking Pvt. Ltd. warning them to be more carefulin future.

* Order passed against CSFB Securities (I) Pvt. Ltd. on 10.9.04suspending the broker for a period of three months.

* Order passed against SS Corporate Securities on 21.9.04suspending the broker for a period of 3 months.

Final Orders have been passed against Visaria Securities Ltd.(suspension for 3 months) and SBM Investments (sub broker ofMukesh Babu Securities Pvt. Ltd.) (suspension for 4 months)also on 11.10.04 and 14.10.04 respectively.Aftek InfosysAdjudication proceedings were initiated against Classic CreditLtd., Panther Investrade Ltd., Mividha Investments Pvt. Ltd., JDPShare & Stock Brokers Ltd., for violation of SEBI (SubstantialAcquisition of Shares & Takeovers) Regulations, 1997. A penaltyof Rs.5.00 lakh was imposed and paid.Enquiry proceedings were conducted against TriumphInternational India Ltd., Triumph Securities Ltd. and NH SecuritiesLtd and certificate of registration granted to these entities werecancelled vide order dated 31.3.04.Enquiry proceedings were also conducted against broking entitiesC J Dalal, Hem Securities, Milan Mahendra and Latin Manharlal.C J. Dalal was suspended for two years and Latin ManhralalSecurities Ltd. was suspended for six months. Against other twobrokers, hearings held, orders are being passed.Adjudication proceedings were initiated against VidyutInvestments Ltd. for violation of SEBI (Substantial Acquisition ofShares & Takeovers) Regulations, 1997. Penalty of Rs. 3.00 lakhwas imposed and paid.Ketan Parekh entities have been banned from dealing in securitiesmarket for a period of 14 years.Criminal complaints filed against nine entities including KetanParekh.Zee TelefilmsEnquiry proceedings have separately been initiated against thefollowing broking entities, who aided and abetted Ketan Parekh


25

entities in market manipulation by entering into structured andsynchronized dealings:

Broker Action already taken

Woodstock Order dated 10.9.04 passed warning theBroking Pvt. Ltd. broker in the case of GTBMukesh Babu In the case of GTB, order dated 10.9.04Securities Ltd. passed suspending registration for 1 yearMangal Keshav Enquiry Proceedings under progressShares & StockBrokers Ltd.Milan Mahendra Ltd. Hearing complete. Order being passed.Visaria Securities In the case of GTB, order dated 11.10.04Pvt. Ltd. passed suspending registration for 3 months

Global TeleEnquiry proceedings have separately been initiated againstvarious following brokers, stock brokers for aiding and abettingKetan Parekh entities in market manipulation by entering intostructured and synchronized dealings :

Broker Action already taken

Vyomit Stock & Enquiry ProceedingsInvestment Pvt. Ltd. under progressOmega Equities Enquiry ProceedingsPvt. Ltd. under progressMangal Keshav Enquiry ProceedingsShares & Stock under progressBrokers Ltd.Chandravadan J Dalal Order dated 24.2.04 passed suspending

the broker for 2 years inthe case ofLupin, Aftek, Ranbaxy, Shonkh and GTB

Hem Securities Ltd. Order under preparationLatin Manharlal In the case of GTB, Aftek and Shonkh,Securities Pvt. Ltd. order dated 18.11.03 passed

suspending registration for 6 monthsMukesh Babu In the case of GTB,order dated 10.9.04Securities Ltd. passed suspending registration for

1 year


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Milan Mahendra Order is being passedSecurities Pvt. Ltd.Visaria Securities In the case of GTB,order dated 11.10.04Pvt. Ltd. passed suspending registration for 3

monthsPravin V Shah Enquiry ProceedingsStock Broking initiatedWoodstock Order dated 10.9.04 passed warningSecurities Pvt. Ltd. the broker in the case of GTB

Adani Exports Ltd.Action against promotersAdjudication proceedings are initiated on 15.9.04 against KetanParekh entities namely; Classic Credit Ltd., Classic Share & StockBroking Ltd. Panther Fincap, Panther Investrade Ltd., TriumphInternational India Ltd. and Triumph Securities Ltd. for violationof regulation 7 of the SEBI (Substantial Acquisition of Shares &Takeovers) Regulations, 1997.Show cause notice is being issued to Abhinav Investments fordebarring them from dealing in securities for violation of regulation4 of the SEBI (Prohibition of Fraudulent and Unfair TradePractices Relating to Securities Market), Regulations, 1995.Enquiry proceedings have separately been initiated againstfollowing brokers, stock brokers for aiding and abetting KetanParekh entities in market manipulation by entering into structuredand synchronized dealings :

Broker Action already takenOmega Equities Enquiry Proceedings underPvt. Ltd. progress.Woodstock Order dated 10.9.04 passedBroking Pvt. Ltd. warning the broker in the case of GTB.Chandravadan Order dated 24.2.04 passed suspending theJ Dalal broker for 2 years in the case of Lupin,

Aftek, Ranbaxy, Shonkh and GTB.Hem Securities Order under preparation.Ltd.Latin Manharlal In the case of GTB, Aftek and Shonkh,Securities order dated 18.11.03 passed suspendingPvt. Ltd. registration for 6 months.


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Milan Mahendra Order under preparation.Securities Pvt. Ltd.Visaria Secu- In the case of GTB, Order dated 11.10.04rities Pvt. Ltd. passed suspending registration for 3 months.Pravin V Shah Enquiry proceedings initiated.Stock BrokingKeynote Capitals Enquiry proceedings initiated.Ltd.Enquiry proceedings initiated against Prerak Capital, JBSSecurities Ltd., Moneycare Securities & Financial Services Ltd.,Madhuvan Securities Pvt. Ltd. and Investmart India Ltd., forviolation of SEBI (Prohibition of Fraudulent and Unfair TradePractices Relating to Securities Market), Regulations, 1995, SEBI(Stock Brokers) Rules & Regulations, 1992.Lupin Lab. PromotersAfter completion of enquiry proceedings, certificate of registrationgranted to Triumph International India Ltd., Triumph SecuritiesLtd. and NH Securities Ltd. were cancelled vide order dated8.12.03.Enquiry proceedings were also conducted against various brokingentities namely; C J Dalal, Milan Mahendra, Hem Securities andPravin V. Shah Stock Broking. C J. Dalal was suspended for twoyears vide order dated 23.02.04. Proceedings in case of otherbrokers are on.Criminal complaints filed against 14 entities in the Court of Addl.CMM, Mumbai (CC No. 630/W/03).Cyberspace Ltd.Enquiry was initiated against 28 brokers. With regard to other26 entities, action is completed. Enquiries initiated against M/sRenaissance Securities Ltd. and M/s Mangala Capital ServicesLtd. are in progress.Directions have been issued against Shri Rakesh Mehtaprohibiting him from accessing the securities market and dealingin securities in any manner till investigation/inquiry is complete.The investigations into the dealings of Shri Rakesh Mehta areunder progress.Directions have been issued to Shri Jugal Kishore Barasia on17.08.2004, restraining him from accessing the securities market


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and prohibiting him from buying, selling and dealing in securitiesfor a period of one year.44 show cause notices have been issued against the 19associate/shell companies (and their directors) which were foundto have aided and abetted the company in the manipulation ofthe scrip. Show cause notices have also been issued to thethree promoters of M/s Cyberspace Ltd. and the CenturyConsultants Ltd. Hearings in the case of 13 entities/individualsheld on 27.11.2004. 5 entities/individuals attended the hearingand 4 entities/individuals furnished written submissions. Theprocess of service of show cause notices against the otherdirectors/entities out of the 19 associate/shell companies andtheir directors and the three promoters of Cyberspace Ltd. &Century Consultants Ltd. is under progress.Silverline Technologies Ltd.Enquiry show cause notices issued to the five broking entitieson 13.08.2004.Adjudication proceedings against M/s Silverline HoldingsCorporation, M/s Subra Maruitius Limited and M/s ShreyasHoldings Ltd. under progress.Adjudication proceedings u/s 15A were initiated against thecompany as well as its promoters for non-compliance of SEBIsummons. The Adjudicating Officer vide his orders dated10.10.03 and 24.10.03 has levied monetary penalties ofRs.19,00,000 and Rs.21,00,000 on the company and itspromoters respectively for this default. Appeal was filed by thethree promoter entities against the penalty imposed by SEBIwhich was heard by SAT on 9.7.04 and the penalty amount hasbeen reduced from Rs.21 lakh to Rs.1.5 lakh. Payment not yetmade. Recovery proceedings are being initiated.Prosecution was filed against M/s Silverline Technologies Ltd.for non payment of Adjudication penalty of Rs.19 lakh on17.08.2004.Adjudication proceedings against 04 brokers completed. Penaltylevied of Rs.1 lakh on Milan Mahendra Securities Pvt. Ltd., Rs.2lakh on Latin Manharlal Securities Pvt. Ltd. and Rs.1 lakh onTriumph International Finance India Ltd. vide orders dated23.08.2004 and 24.08.2004.


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SSI Ltd.Enquiry show cause notices have been issued to the three entitieson 06.08.2004.Adjudication proceedings completed. The Adjudication Officerhas imposed a penalty of Rs.1 lakh on Milan Mahendra SecuritiesPvt. Ltd. and Rs. 1 lakh on Triumph International Finance IndiaLtd. vide orders dated 23.08.2004 and 24.08.2004. Proof ofpayment of adjudication penalty not furnished by the entities.Recovery proceedings are in the process of being initiated.Prosecution proceedings u/s 23(1)(b) of the SCRA initiatedagainst the promoters of SSI and three individuals. The processof issuing directions against the three promoters of SSI Ltd. andthree individuals for violation of provisions of SCRA is underprogress.Reference made to Chief Commissioner of Income Tax, Chennaion 31.5.04 to look into the aspect of evasion of tax (Capital Gainson sale of shares by promoters etc.) involved in the matter.Enquiry proceedings against 4 brokers initiated on 2.4.2004. Itmay be noted that the certificate of registration of 3 of thesebrokers, which were KP entities, have already been cancelledby SEBI.Himachal Futuristic Communications Ltd. (HFCL)Actions against HFCL and its promoters/associatecompanies and their directorsShow cause notices under Sections 11(4)(b) and 11B of SEBIAct 1992 read with Regulation 11 of SEBI (Prohibition ofFraudulent and Unfair Trade Practices relating to SecuritiesMarket) Regulations, 2003 have been issued to HFCL/its directorsand following mentioned promoters/associate companies ofHFCL and their directors on 30.8.04.

• HFCL Infotel Ltd.• HFCL Trade Invest Ltd.• Burlington Finance Ltd.• Toplight Vinimay Pvt. Ltd.• Vinson Brothers Pvt. Ltd.• Vinson Trade & Commerce Pvt. Ltd.• Amrit Sales Promotion Pvt. Ltd.• Classic Services (Partnership firm)• Sone Paper & Industries Ltd.


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• Shankar Sales Promotion Pvt. Ltd.• Yashodham Merchants Pvt. Ltd.• Kalyan Vyapaar Pvt. Ltd.• Sungrace Merchandise Pvt. Ltd.• Baldev Commercial Pvt. Ltd.

Enquiry proceedings have separately been initiated againstvarious following stock brokers for aiding and abetting KetanParekh entities in market manipulation by entering into structuredand synchronized dealings in HFCL :

Broker Actions already taken

Chandravadan Order dated 24.2.04 passed suspending theJ Dalal broker for 2 years in the case of Lupin,

Aftek, Ranbaxy, Shonkh and GTB.Hem Securities Ltd. Order under preparation.Indsec Securities In the case of GTB, vide order dated& Finance Ltd. 10.9.04, warning has been issued.Keynote Capitals Enquiry initiatedLtd.Latin Manharlal In the case of GTB, Aftek and Shonkh, orderSecurities Pvt. Ltd. dated 18.11.03 passed suspending

registration for 6 monthsMangal Keshav Enquiry ProceedingsShares & Stock under progress.Brokers Ltd.Milan Mahendra Order under preparation.Securities Pvt. Ltd.Millenium Equities In the case of GTB, Order dated 13.9.04(I) Pvt. Ltd. passed suspending for 6 monthsAldan Investment Enquiry ProceedingsPvt. Ltd. under progressMukesh Babu In the case of GTB, Order dated 10.9.04Securities Ltd. passed suspending registration for 1 year.Omega Equities Enquiry ProceedingsPvt. Ltd. under progressPravin V Shah Enquiry ProceedingsStock Broking under progressSubhkam Securities In the case of Silverline,warning has been

issued.


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Vidyut Devendra Enquiry ProceedingsKumar under progressVisaria Securities In the case of GTB, Order dated 11.10.04Pvt. Ltd. passed suspending registration for 3 months.Vyomit Stock & Enquiry Proceedings under progressInvestment Pvt. Ltd.Woodstock Broking Order dated 10.9.04 passed warningPvt. Ltd. the broker in the case of GTBWoodstock Order dated 10.9.04 passed warningSecurities Pvt. Ltd. the broker in the case of GTB.As reported in July, 2005DSQ SoftwareAction against promotersThe appeals against the SEBI Orders dated 09.09.2004 issuedagainst Shri Dinesh Dalmia and M/s DSQ Software and itsdirectors were heard by the Hon’ble SAT on 04.02.05. In thematter of DSQ Software the matter is posted for hearing on19.09.2005.In the matter of Shri Dinesh Dalmia, SAT had directed him to paya deposit of Rs. 5 crore before the matter could be admitted forhearing and he has paid an amount of Rs. 2.5 crore. On therequest of the appellant the sum was reduced to Rs.2.5 crore.The matter is posted for hearing on 19.09.2005.Adjudication in the case of M/s Dinesh Dalmia Technology Trust,M/s Hulda Properties and Trade Ltd., M/s DSQ Holdings Ltd., M/s Doe Jones Investment and Consultants Pvt. Ltd. and M/sPowerflow Holding and Trading Co. Pvt. Ltd. completed and thedetails of the penalty is as following:

DSQ Holdings Ltd Rs.10,00,000Powerflow Holding &Trading Co. Pvt. Ltd. Rs.25,000Hulda Properties &Trades Ltd Rs.10,00,000Dinesh Dalmia Tech Trust Rs.5,00,000Doe Jones Invest &Consult Pvt. Ltd Rs.15,000Herald Equities Pvt. Ltd. No Penalty

The orders in the case of M/s Dinesh Dalmia Technology Trustand M/s DSQ Holdings Ltd. were duly served at the respective


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addresses on 08.02.2005. In the case of M/s Hulda Propertiesand Trade Ltd. and M/s Powerflow Holding and Trading Co. Pvt.Ltd. the orders were pasted at the their respective addresses on04.03.2005 and in case of M/s Doe Jones Investment andConsultants Pvt. Ltd. the order was delivered and acknowledged.Order in the case of M/s Herald Equities Pvt. Ltd. was also servedat their respective address.Pursuant to the completion of adjudication proceedings, thepenalty amount has been paid by M/s Doe Jones Investmentsand Consultants Pvt. Ltd. in March 2005. The other parties havenot paid the penalty amount within the stipulated time period of45 days and prosecution proceedings are in the process of beinginitiated against the entities

DSQ Industries Ltd.

Action against promoters

Order passed on 10/12/2004 against the following entitiesprohibiting them from accessing the securities market and dealingin securities market for a period of 10 years:

• DSQ Holdings Ltd.• Hulda Properties and Trades Ltd.• Cooltex Commodities Ltd.• Greenfield Investments P Ltd.• Arun Polymers P Ltd.• Aspolite Barter• Naina Barter• Dinesh Dalmia• Ashok Sharma.

Action against other entities

1. Order dated 08.11.2004 passed against M. Tibrewal & Co.prohibiting for a period of 2 years from accessing capitalmarket.

2. Order dated 03/01/2005 passed against Classic Credit andPanther Fincap and Management Services Ltd. to makepublic announcement under Takeover Regulation taking01.03.2001 as the reference date for calculation of offer pricewithin 45 days of the date of the order.


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3. Order dated 19/01/2005 passed against Doe Jones

Investments Ltd. and Arihant Exim Pvt. Ltd. prohibiting themfrom accessing capital markets for 2 years.

4. Order dated 27/01/2005 passed against Biyani SecuritiesPvt. Ltd. and its directors and Harish Biyani prohibiting themfrom accessing capital markets for 5 years.

Action against brokers1. Order dated 07/01/2005 passed against Niraj Balasaria, stock

broker, CSE suspending the certificate of registration for aperiod of 3 months.

2. Order dated 17/05/2005 passed against Indsec SecuritiesLtd. No case against the broker under the definition of fraudwas observed.

Padmini Technologies Ltd. (PTL)Action against PTL and its whole time directorsPTL and Vivek Nagpal have appealed against the order ofAdjudicating Officer before SAT. The appeals were admitted on15.3.2005 and 13.4.2005 respectively.SAT vide order dated 13.4.2005 directed SEBI not to take anycoercive steps against Shri Vivek Nagpal on the condition thathe deposits a sum of Rs. 50,000/- with SEBI. The said paymenthas since been received from Shri Nagpal. Subsequently, SATvide its final order dated 28.06.2005 has reduced the penaltyamount from Rs. 3 lac to Rs. 1.5 lac in case of Shri Vivek Nagpaland from Rs. 5 lac to Rs. 1.5 lac in case of PTL.

Proceedings u/s11B of SEBI Act are under way; show causenotices were issued to the company and its directors. Anopportunity for personal hearing was granted to PTL & its whole-time directors on 11.11.2004, which was not availed. Anotheropportunity was given on 30.11.2004 and 15.12.2004. Duringthese hearings, their advocates sought opportunity for crossexamination. This aspect has been legally examined and it hasbeen decided to deny cross examination in light of sufficientcorroborative evidences available with SEBI. While, thedocuments relied in preparation of show cause notices havealready been provided, an opportunity of fresh personal hearingis proposed before passing the order against them.


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Action against Ketan Parekh GroupPanther Fincap and Management Services Ltd., ClassicCredit Ltd. and their Directors (including Ketan Parekh)An opportunity for personal hearing was given to Ketan Parekhentities/ their directors on 24.11.2004, which was not availed.Another opportunity was given on 15.12.2004 when theiradvocates sought an opportunity for cross examination, whichhas been legally examined. It has been decided that since SEBIhas sufficient corroborative evidences, cross examination shallbe denied. Further, vide letter dated 22.12.2004 a reply to theshow cause notice has been received. An opportunity of freshpersonal hearing is proposed before passing the order againstthem.Adjudication proceedings have been completed and AdjudicationOfficer, vide his orders dated 23/24.08.04, has imposed a penaltyof Rs.5 lac each on Panther Fincap and Management ServicesLtd. and Classic Credit Ltd.The entities have appealed against the order of AdjudicatingOfficer before SAT. The matter came up for hearing on 8.6.2005before SAT and was adjourned to 3.8.2005.Triumph International Finance Ltd. (TIFL)A reply to show cause notice dated 27.8.2004 has been receivedfrom TIFL vide its letter dated 12.1.2005. TIFL has howeversought an opportunity for personal hearing, which is proposedbefore passing the order against them.It may be noted that registration of TIFL is already cancelled forviolations committed in other cases vide an earlier order dated16.5.02. The date of order was earlier inadvertently mentionedas 16.5.03 in the 3rd Progress Report. Error is regretted.Action against Statutory Auditors(Kailash Chandra Agarwal, Chartered Accountant)In regard to proceedings u/s 11B of SEBI Act, the submissionsof auditor vide letter dated 22.1.2004, 23.8.2004 and 18.10.2004have been examined. Fresh opportunity of hearing was alsogranted to auditor for 29.3.2005, which was adjourned. Freshhearing is proposed before passing the order.Action against OthersSanjay Kumar, Chartered AccountantIn regard to proceedings u/s 11B of SEBI Act, an opportunity for


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personal hearing was granted to Shri Sanjay Kumar on 15.3.2005,however he failed to appear citing medical problem and statingthat SEBI had already initiated prosecution on similar charge.Meanwhile, a reply dated 17.6.2005 to the show cause noticehas also been received from Shri Sanjay Kumar. Fresh hearingis proposed before passing the order against him.A reminder was issued to ICAI seeking status of reference dated26.12.2003. ICAI vide its letter dated 4.11.2004 informed thatclarification has been received from Shri Sanjay Kumar andfurther action is being taken as per the provisions of Section 21of the Chartered Accountants Act, 1949.Shri Sanjay Kumar had appealed against the order for impositionof penalty by Adjudicating officer. SAT vide its order dated24.11.2004 admitted the appeal by Shri Sanjay Kumar againstthis order and directed SEBI not to take any coercive stepsagainst the appellant on conditions that appellant deposit a sumof Rs.50,000. The said amount has been paid by the appellant.Subsequently, SAT on 10.2.2005 has passed a final order andreduced the quantum of penalty to Rs. 25,000/-.

• Kolkatta based preferential allotteesChairman, SEBI had granted opportunities of personal hearingto 18 Kolkata based preferential allottees on 22.12.2004 and30.12.2004 against whom proceedings u/s 11B of SEBI Act wereinitiated. None of these entities appeared for hearing. However,3 allottees got stay from Calcutta High Court against theproceedings by SEBI. Calcutta High Court vide its orders dated23.3.2005 has dismissed the appeals filed by 3 Kolkatta basedpreferential allottees. Another opportunity of personal hearing isproposed before passing order against the allottees.

• Delhi based preferential allotteesShow cause notices were issued to 12 Delhi based allottees/their directors in October/ November 2004. Some entities hadsought copies of documents relied in preparation of show causenotices, which were duly provided. No reply has been receivedfrom them.An opportunity for personal hearing was granted to these entitieson 15.3.2005, however none of them appeared. Some Delhibased entities namely VB Impex P Ltd., Iris Infrastructurals P.Ltd., Mikona Impex & Traders P. Ltd., DKG Buildcon P. Ltd. and


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JP Promoters P. Ltd. sought another date of hearing. No replywas received from others. Fresh hearing is proposed beforepassing the order against them.A & A Finvest P. Ltd. ( a sub-broker)Fresh opportunity of hearing was granted to A & A Finvest P. Ltd.for 29.3.2005, which was adjourned. Fresh hearing is proposedbefore passing the order against the entity.Shonkh Technologies Ltd.Action against Promoters/Company11B actions against Promoters of the company:Pursuant to Show Cause Notices issued to the promoters andassociated entities (15 entities) of Shonkh TechnologiesInternational Limited, 2 entities have sought inspection ofdocuments and the same have been provided in October 2004.The entities sought adjournment of personal hearing fixed for5th April, 2005. Subsequently, personal hearing before WholeTime Member has been fixed for 2nd August, 2005.Adjudication against Shri Vivek Nagpal and promoters ofShonkh Technologies International Ltd.Adjudication orders levying a penalty of Rs.1 crore each againstShri Vivek Nagpal and Padmini Techologies Ltd. have beenpassed. Against the adjudication orders, Shri Vivek Nagpal andPadmini Technologies Ltd. have filed an appeal before SAT andas per the interim orders of SAT dated 19th April, 2004 they havedeposited a sum of Rs.1,50,000/- each. SAT, vide its final ordersdated 3rd February 2005, reduced the penalty of AdjudicationOfficer from Rs. 1 crore to Rs. 10,000/- for M/s. PadminiTechnologies Ltd. and from Rs. 1 crore to Rs. 40,000/- for ShriVivek Nagpal. The penalties have been paid.Adjudication against associated entities of the company/promotersPresent position is as follows:(i) Against 2 entities no penalty has been imposed by the

Adjudicating Officer. (On 31.12.2003, adjudication ordershave been passed against Shri D.K.Jain and DelhiSecurities Ltd.)

(ii) Against 15 entities penalty of Rs. 1 crore each was leviedby the Adjudicating Officer. Accordingly, the position statedin the 3rd Progress Report as 16 entities stands corrected.Error is regretted.


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(iii) Out of the above, one entity (Shri Mukesh Malhotra) hasappealed before SAT against the adjudication order. SATvide order dated 16th September, 2004 directed ShriMukesh Malhotra to deposit Rs. 25,000/- with SEBI andco-operate with SEBI in the case. Shri Mukesh Malhotra,vide letter dated 20.10.2004, has deposited the amountwith SEBI.

Names and dates of adjudication orders of the above entitiesare given below:(i) On 28.11.2003, orders have been passed against the followingentities: Ankur Cultivators P Ltd., Saral Website & Exim Pvt. Ltd.,Mikona Impex & Traders P Ltd., Sanyo Finance P Ltd.,Spectrum.com P Ltd., Iris Infrastructure P Ltd., DKG Buildcon PLtd. and Churuwala Exports P Ltd.(ii) On 10.12.2003, orders have been passed against Zodiac.comP Ltd. and Noted Infotech P Ltd.(iii) On 18.12.2003, order has been passed against AdvanceHovercrafts and Composites (India) Ltd.(iv) On 22.12.2003, orders have been passed against Shri RaviKrishnamoorti and Shri C.V.R. Rao.(v) On 31.12.2003, order has been passed against R. C. Gupta& Co. P Ltd.Also, adjudication order dated 10.06.2005 has been passedagainst M/s. Shonkh Technologies International Ltd. imposing apenalty of Rs. 50,000/-.The penalties are yet to be paid. Further actions for non paymentof penalties are under consideration.Prosecution proceedings against promoter entities andother entities:Prosecution proceedings have been launched on 24th December,2004 against Shri Vivek Nagpal, M/s. Padmini Technologies Ltd.and the following 13 entities before Additional Chief MetropolitanMagistrate, New Delhi:1. M/s. Advance Hovercrafts and Composites India Ltd.2. M/s. Ankur Cultivators Pvt. Ltd.3. M/s. Churuwala Exports Pvt. Ltd.4. M/s. DKG Buildcon Pvt. Ltd.5. M/s. Iris Infrastructurals Pvt. Ltd.6. M/s. Mikona Impex and Traders Pvt. Ltd.


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7. M/s. Noted Infotech Pvt. Ltd.8. R C Gupta & Co. Pvt. Ltd.9. M/s. Sanyo Finance & Investment Pvt. Ltd.10. M/s. Saral Website and Exim Pvt. Ltd.11. M/s. Shonkh Technologies Inter-national Ltd.12. M/s. Spectrum.com Pvt. Ltd.13. M/s. Zodiac.com Pvt. Ltd.Adjudication against other entities:Adjudication orders have been passed against 4 other entities.The details of the orders are given below:Name of Entity Date of Penalty

Order Imposed(Rs.)

M/s. A Nitin Capital Services Ltd. 11th March, 2005 50,000/-M/s. Rajkar Electricals & 14th March, 2005Electronics Pvt. Ltd. 15,000/-Shri Baldev Raj 29th April, 2005 15,000/-M/s. Harpal Associates Pvt. Ltd. 31st May, 2005 15,000/-

The penalties are yet to be paid.Actions against BrokersEnquiry reports have been received against 8 brokers. Ordersagainst two of them have been passed (vide order dated 18thNovember, 2003, Latin Minarlal has been suspended for 6 monthsand vide order dated 23rd February, 2004 C.J. Dalal has beensuspended for 2 years).Enquiry reports have been received against Hem Securities andMilan Mahendra. Hearing for these two entities has also beencompleted. Orders under preparation.Enquiry reports have been received against 4 other brokingentities. The details of the same are given below:

Name of Date of Reco-Intermediary Enquiry mmendation

Report of EnquiryOfficer

M/s. A Nitin Capital Services Ltd. 31st May, 2005 CensureM/s. Agroy Financeand Investment Ltd. 31st May, 2005 CensureM/s. Delhi Securities Ltd. 20th June, 2005 CensureM/s. A Jain & Co. Pvt. Ltd. 29th June, 2005 No Penalty


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The same are under consideration.Actions against other entities:Show cause notices issued against Money Growth Investmentand Consultants Pvt. Ltd. on 26th September, 2004, ShamitFinvest Pvt. Ltd. on 24th September, 2004 and ShonkhTechnologies International Ltd. on 17th September, 2004. MoneyGrowth Investment and Consultants Pvt. Ltd., replied vide theirletter dated 25th October, 2004, Shonkh TechnologiesInternational Ltd. replied vide their letter dated 8th October, 2004and Shamit Finvest Pvt. Ltd. replied vide their letter dated 12thOctober, 2004. As per their request, inspection of documentshas been provided to Money Growth and Shonkh Technologiesin April 2005. Subsequently, Shonkh Technologies and MoneyGrowth have sought copies of documents. The same are beingprovided.Further, Show Cause Notices dated 17th May, 2005 under Section11B of SEBI Act issued against the following 8 entities:

1. Mukesh Gupta2. FNS Consultants Pvt. Ltd.3. Baldev Raj4. Rajkar Electricals & Electronics Ltd.5. Gopi Ram Gupta6. Harpal Associates Pvt. Ltd.7. Baldev Harish Elect Pvt. Ltd. and8. Ms. Simmy Gupta

Reply has been received from Ms. Simmi Gupta (on behalf ofMs. Simmi Gupta and Shri Gopi Ram Gupta) vide her letter dated16th June, 2005 and the same is under examination. Repliesfrom other entities have not been received so far.Actions relating to Listing of shares on BSE and DSEBSE and DSE

sixth progress report on the action taken pursuant … · 2018. 10. 2. · 6. prosecutions have...

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